Iowa Code 523H.8 – Nonrenewal of a franchise
Current as of: 2023 | Check for updates
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1. A franchisor shall not refuse to renew a franchise unless both of the following apply:
a. The franchisee has been notified of the franchisor’s intent not to renew at least six months prior to the expiration date or any extension of the franchise agreement.
b. Any of the following circumstances exist:
(1) Good cause exists, provided that the refusal of the franchisor to renew is not arbitrary or capricious. For purposes of this section, “good cause” means cause based on a legitimate business reason.
(2) The franchisor and franchisee agree not to renew the franchise.
(3) The franchisor completely withdraws from directly or indirectly distributing its products or services in the geographic market served by the franchisee, provided that upon expiration of the franchise, the franchisor agrees not to seek to enforce any covenant of the nonrenewed franchisee not to compete with the franchisor or franchisees of the franchisor.
Terms Used In Iowa Code 523H.8
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Franchise: means either of the following:(1) An oral or written agreement, either express or implied, which provides all of the following:(a) Grants the right to distribute goods or provide services under a marketing plan prescribed or suggested in substantial part by the franchisor. See Iowa Code 523H.1
- Franchisee: means a person to whom a franchise is granted. See Iowa Code 523H.1
- Franchisor: means a person who grants a franchise or master franchise, or an affiliate of such a person. See Iowa Code 523H.1
2. As a condition of renewal of the franchise, a franchise agreement may require that the franchisee meet the then current requirements for franchises and that the franchisee execute a new agreement incorporating the then current terms and fees for new franchises.